CytoSorbents Corporation (OTCBB: CTSO) 2013 Earnings and Operating Results Conference Call

Corporation (OTCBB: CTSO)

2013 Earnings and Operating Results

March 31, 2014 @ 4:15 pm Eastern

This official company transcript has

been edited for clarity and does not differ materially from the actual conference call. Slide numbers have been inserted to allow

readers to follow along with the associated presentation.

Good day, ladies and gentlemen. Thank you

for standing by. Welcome to the CytoSorbents 2013 Shareholder Update Conference Call. During today's presentation, all parties

will be in a listen-only mode. This conference is being recorded today, March 31, 2014.

I would now like to turn the conference

over to our moderator, Ms. Donna Marincas. Please go ahead, Donna.

Donna Marincas - Moderator:

Thank you operator and good afternoon.

Welcome to CytoSorbents 2013 Operating and Financial Results Conference Call.

Slide 3: With us today are:

Slide 2: Before I turn the call

over to Dr. Chan, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking

statements which are subject to risks and uncertainties. Management may make additional forward-looking statements in response

to your questions today. Therefore, the Company claims protection under Safe Harbor for forward-looking statements contained in

the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today and therefore, we

refer you to a more detailed discussion of these risks and uncertainties in the Company's filings with the SEC. Any projections

as to the Company's future performance represented by management include estimates today as of March 31, 2014 and the Company assumes

no obligation to update these projections in the future as market conditions change.

During today's conference call,

we will first have an overview presentation covering the financial and operational highlights for the quarter by Dr. Chan and

Ms. Bloch. We again have done our best to take everyone's submitted questions and will do our best to address

them in the presentation, but also in a Q&A session with management to follow. Thanks everyone again for participating. If

we do not answer your question, we would ask you to contact the Company directly after the call today.

At this time, I would like to turn the

call over to Dr. Phillip Chan. Please go ahead Dr. Chan.

Thanks very much Donna and welcome everyone

to our 2013 operating and financial results conference call. Thank you for taking the time to join the call today.

Since our last earnings report, there have

been a lot of developments and we definitely have new shareholders online today. What I'd like to do is go over a brief summary

of the company for the benefit of those new shareholders as well as for those who need an update of our story. Following that,

Kathy will give a brief overview of our financial and operating progress for the quarter as well as for 2013, and I will come back

on the line with an overview of the catalyst for 2014 that will help us drive growth for this year.

Slide 4: CytoSorbents is an

emerging leader in critical care immunotherapy. We are leading the prevention or treatment of life-threatening inflammation in

the intensive care unit. When we talk about immunotherapy, broadly taken, it is the ability to manipulate the immune response to

help fight disease. This is a $100 billion revenue market. This is not a total addressable market, this is not a potential theoretical

market. This is actually a market that has $100 billion in revenues from blockbuster products focused on manipulating the immune

Slide 5: Now we all know that in

order for the immune response to function normally, it has to be not too high and not too low. When the immune system is not functioning

well, people are at high risk of developing infection, cancer, as well as poor healing. And on the other end of the spectrum, when

the immune system is too high, patients are at high likelihood of developing things like allergy, asthma, anaphylaxis, autoimmune

diseases, severe inflammation such as sepsis and SIRS, and organ failure.

Companies have worked to try to counter

this by developing products, that when the immune system is too weak, will activate the immune response. Vaccines are an excellent

example of that. The five top companies in the vaccine space include Sanofi, Merck, GSK, Pfizer and Novartis, and together have

$26 billion in vaccine revenue alone - it is a $30+ billion category overall. And in the cancer immunotherapy space, $20 billion

in product revenues are generated every year with such blockbuster products such as Rituxan, Herceptin, Erbitux and others and

even cancer vaccine such as Provenge and other immunotherapies such as Yervoy from Bristol-Myers Squibb.

On the high end, when we're trying

to suppress the immune response, all of us have no doubt taken antihistamines for seasonal allergies, or steroids for other complications

of inflammation. Blockbuster products such as Zyrtec, Claritin, Allegra, and asthma medications such as Advair and Singulair produce

more than $20 billion in revenues every single year. And in the treatment of autoimmune diseases, blockbuster products such as

Enbrel from Amgen, Humira from AbbVie and Remicade from Johnson & Johnson, those three products alone have $26 billion in worldwide

revenue every year. And again, this is a $30+ billion revenue market overall.

But where CytoSorbents fits is really in

a space where we're almost by ourselves - this is in the critical care immunotherapy space where we're trying to reduce

the deadly inflammation that is leading to organ failure and death in patients with diseases like sepsis, burn injury, trauma and

many others. CytoSorb is a product that is approved in all 28 countries of the European Union, and is currently commercially

available in nine countries generating revenue, with 30+ post-market studies, the support of more than a 100 key opinion leaders,

and little-to-no competition.

Slide 6: So what is the $20 billion

critical care opportunity? Unfortunately many of us on the phone today know someone who has been admitted into the intensive care

unit for a life-threatening illness. In fact, millions of people are admitted to intensive care units every year in the U.S. and

in the European Union with deadly inflammation caused by inflammatory conditions such as sepsis, ARDS (acute respiratory distress

syndrome), burn injury, trauma, pancreatitis, influenza, and complications of surgery. In fact, in these conditions, little exists

to reduce inflammation and actively help patients get better. Rather, patients often need to be kept alive with machines called

"life support" things like mechanical ventilation and dialysis with the hope that their bodies heal

on their own over time. So without active therapies, patients linger in the ICU at cost of $2,000 to $3,000 a day in the United

States. Despite having some of the best medical treatment in the world, here in the United States still one in every three patients

often die in these life-threatening conditions. Because of this, and because of the lack of effective therapies to actively impact

outcome, the U.S. alone spends almost 1% of our gross domestic product, a staggering $80 - $90 billion on critical care medicine

Slide 7: So what is driving this

inflammation? Well, the inflammation is being driven by small proteins called cytokines that normally orchestrate the immune response,

and normally help stimulate and regulate the immune system to control inflammation. But cytokines are very much a dual-edged sword.

They are required for proper immune system function but when they are elevated they can actually cause or exacerbate

diseases such as autoimmune diseases.

Slide 8: But when they are in vast

excess, as is often found in patients with life-threatening conditions, it's often called "cytokine storm" and

that cytokine storm leads to massive uncontrolled inflammation that leads to the failure of vital organs, such as the lungs, the

brain, the heart, the kidneys, the liver and many other vital organs in the body. In fact, organ failure causes nearly half of

all deaths in the ICU today and little can be done to prevent or treat it.

Slide 9: So that is where we come

in. CytoSorb is specifically designed to remove the fuel to the fire of inflammation in the body. In fact, it represents one

of the newest and most powerful immunotherapies to control inflammation. It's approved in the European Union as the only

specifically approved cytokine filter and it is clinically proven to reduce key cytokines and cytokine storm by 30% to 50% in critically-ill

patients. It has a very broad indication for use, approved for use in any situation where cytokines are elevated, and it's

now been used safely in more than 1,500 human treatments with no serious device related adverse events.

Slide 10: The heart of our technology

is what you see here in this slide. It is a highly biocompatible, porous polymer bead roughly the size of grain of salt that acts

like a tiny sponge to remove harmful substances from blood and bodily fluids. The beads remove things based on size

as well as surface adsorption. These beads are protected by 32 issued U.S. patents and multiple applications pending and we manufacture

these beads from raw chemicals at our ISO 13485-certified facility in New Jersey. In fact these beads are one highest grade medical

sorbents on the medical market today.

Slide 11: So the goal of CytoSorb

is really to try to prevent or treat organ failure. When patients come into the ICU either from the emergency room or from the